Common Tax Deductions People Forget to Claim

There's real money left unclaimed every year, and it's rarely the headline deductions people miss. It's the ones that don't announce themselves.

A note before the list: US tax law has seen significant recent legislative change, and some deduction and credit rules have shifted. Treat everything here as a prompt to check current eligibility, not a guarantee — verify against IRS guidance for the year you're filing.

The big one people don't claim: the Earned Income Tax Credit

The EITC is a refundable credit for low-to-moderate-income workers — meaning it can produce a refund even if you owe no tax. And yet, according to IRS figures cited across tax sources, around a quarter of eligible taxpayers fail to claim it.

People miss it because the rules are involved, or because they don't realise their income qualifies — and eligibility can extend further up the income scale than many assume, especially with children. If there's one thing on this list to check, it's this.

The saver's credit

A credit for retirement contributions on low-to-moderate incomes — effectively a bonus on money you were saving anyway. Routinely missed because people don't know it exists.

State sales tax (in some situations)

US taxpayers who itemise can generally choose to deduct either state income tax or state sales tax. For people in states without an income tax, the sales tax option is the one that applies — and it's easy to overlook, especially in a year with a large purchase.

Self-employed health insurance

Self-employed people can often deduct health, dental and vision premiums for themselves and family, provided they aren't eligible for an employer-subsidised plan — including through a spouse.

The quieter ones

Charitable contributions people forget: non-cash donations, and mileage driven for charitable work. Note that charitable deduction rules have been changing, so check the current position. Student loan interest, which can be deductible without itemising. Education credits for tuition and related costs.

The principle underneath all of them

Most missed deductions are missed because of poor records, not ignorance of the rules. You can't claim the charitable mileage you didn't track or the deductible purchase you can't evidence.

Good records through the year are what let you claim everything you're entitled to. StatementOrganizer.com can categorise a year of transactions so deductible items surface.

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References

• The 10 Most Overlooked Tax Deductions (EITC non-claim rate) — GEICO / TurboTax
• The Land of Unknown Tax Deductions (Saver's Credit) — TurboTax (Intuit)
• The 10 Most Commonly Missed Tax Deductions — TurboTax (Intuit)
• 11 Overlooked Tax Deductions and Credits — Kiplinger

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This article is for general information only and is not tax advice. Deductions and credits described are US federal, subject to eligibility rules and income limits, and several have been affected by recent legislation — verify current rules on IRS.gov or with a qualified tax professional. No specific dollar thresholds or amounts are stated, as these change annually.